FTC Warns of Oil Spill Scams

Alert from the Federal Trade Commission

It’s no secret that scam artists follow the headlines, and the daily news of the oil spill in the Gulf of Mexico is no exception. The Federal Trade Commission (FTC), the nation’s consumer protection agency, cautions consumers and businesses to be on the alert for fraudulent activity related to the explosion aboard the Deepwater Horizon drilling rig and the resulting spill – and to report their experiences to federal and state authorities. BP leased the rig, which was owned and operated by Transocean.

The FTC says it’s likely that scammers will use e-mails, websites, door-to-door collections, flyers, mailings and telephone calls to make contact and solicit money. Some may claim they’re raising money for environmental causes or offer fraudulent services – like remediation services – related to the oil spill. Others may claim they can expedite loss claims for a fee. Still others may knock on your door and talk about placing booms or checking for oil on your property. Chances are they’re trying to gain your trust to get inside your home or get access to your personal information.

The FTC says that at the very least, you will want to do some homework before making a donation or entering into an agreement for services.

Regarding Claims

Expect some scam artists to pose as authorized adjusters and ask for fees to expedite services. ESIS, BP’s authorized claims administrator, is not charging individuals or companies any fee to process claims. If you make a claim, you are assigned a claims number through the BP hotline at 1-800-440-0858. An authorized ESIS adjuster will contact you to further verify and process the claim for payment. If you are not satisfied with the resolution, you should call the U.S. Coast Guard’s National Pollution Funds Center (NPFC) at 1-800-280-7118, or visit the NPFC for more information at: www.uscg.mil/npfc/Claims/default.asp

Expect other scam artists to pretend to be government officials – and then require a processing fee to provide government services. The government does not require processing fees.

Regarding Insurance

Verify that you are dealing with authorized representatives of BP, and don’t sign waivers of liability too quickly without getting adequate legal and financial counsel.

Report anyone who is making false or exaggerated insurance claims to your state insurance commissioner.

Report anyone who is making insurance claims but lives outside the disaster zone.

Regarding Contractors

Don’t do business with contractors who require up-front payment for services: You will be out the money if they fail to perform the work or finish the job to your specifications or satisfaction.

Require any contractors you use to detail the services they will perform on a written contract.

Use only licensed contractors.

Regarding Donations to Charities

Some people may misrepresent an affiliation with an environmental organization when they ask for donations via e-mail or social networking sites. If you’re tempted to contribute, check out the charity at www.bbb.org/us/charity, the website of the Better Business Bureau.

Some sham organizations may use copy-cat names to cash in on the reputations of older, more established charities.

Rather than clicking on a link to a purported website, verify the legitimacy of a nonprofit organization by using search engines and other online resources to confirm the group’s existence, history, mission and nonprofit status.

To ensure your contributions are received and used for the purposes you intend, contribute directly to organizations you know rather than relying on other people to make a donation on your behalf.

If you get pressure to make a contribution, look for another charity. Reputable charities don’t use those kinds of tactics.

Avoid donating cash if possible. Pay by debit or credit card, or write a check directly to the charity.

If an organization suggests you wire your donation to them, cross them off your list. Legitimate charities usually do not solicit donations via money transfer services.

Most legitimate charities websites end in .org rather than .com. For more information on the warning signs of a charity scam, visit www.ftc.gov/charityfraud.

Regarding Employment and Volunteer Opportunities

Avoid any job or volunteer opportunities that require you to pay a fee before the job begins.